Math Problem

State Treasurer Sounds Alarm on Monorail Finances

Last month, State Treasurer Michael Murphy wrote a letter to House Speaker Frank Chopp expressing concerns about the Seattle Monorail Project's financial viability. The letter pointed out that under one possible financing scheme, the monorail would have to collect millions more in car-tax revenues than it is currently taking in. In a 40-year financing scheme, Murphy's letter says, annual payments would be "approximately $83 million. The annual tax cash flow from MVET is currently $48 million… It is clear that this cash flow is insufficient."

Monorail Finance Director Jonathan Buchter responded in kind, telling Murphy in a letter that while "the specific financing scenarios you described… are not workable," they are not the ones the SMP plans to use. The agency's plan, unlike the one Murphy assumes in his letter, would put off interest payments until later years, when car values (and thus car-tax revenues) are expected to grow. "By 2025, it's up to $140 million," Buchter says.

Murphy scoffs at that prediction, which he calls an "astronomical" increase. "I would love to see the monorail succeed," Murphy says. "Unfortunately, the math just doesn't work out." Murphy's questions about the monorail, expressed in state senate testimony and in another letter to state Sen. (and monorail opponent) Ken Jacobsen, have been used as fodder for opponents to legislation that would allow the monorail to extend its bonds as long as 60 years, and a bill that would have prevented the agency from issuing bonds until a regional transportation package had been put to a vote in the Seattle area. While Buchter doesn't question Murphy's own political motivations, he does say it's "unfortunate" that Murphy "used his influence to write a letter like this without discussing it with me."